Home sales outlook brightens

REAL ESTATEWoodlands foreclosure rate remains low

Published 5:30 am, Thursday, October 21, 2010

Despite lingering economic uncertainties, an overall decline in the residential real estate market and the current freeze on foreclosures, the outlook for home sales in The Woodlands is positive.

Statewide and in Montgomery County, 2 percent of all single family houses are distressed assets, by foreclosure or pending short sales.

A foreclosure is a house "taken back" by a bank.

A short sale occurs when the outstanding mortgage on a house is higher than the market value, and the owner and mortgage holder agree to list the property for sale at a lower price.

In The Woodlands, 167 of the township's 35,000 single-family houses are distressed assets. That's slightly less than one-half of 1 percent of all houses in The Woodlands and around 14 percent of the 1,179 houses currently listed for sale.

Of the 167 distressed properties in The Woodlands, 19 are bank-owned and listed for sale (11 percent), and 10 are listed as short sales (6 percent).

The remaining 138 are bank-owned but currently off the market (83 percent).

At last count by The Woodlands Township, 10 of the distressed properties are abandoned.

Revitalizing properties

John Powers, assistant general manager of Community Services for the Township, said revitalization programs are in place to bring abandoned properties up to community standards.

The Township will perform regular exterior maintenance and yard work as needed and any costs will be recovered by liens placed on those properties.

In Texas, 80 percent of the home foreclosure filings have been for properties valued under $200,000, according to the Foreclosure Listing Service Inc.

The same holds true for foreclosures in The Woodlands, said real estate broker Michael Blount, with 80 percent of the township's foreclosures concentrated in the Grogan's Mill, Panther Creek and Cochran's Crossing villages.

Properties valued at more than $1 million make up less than 1 percent of all foreclosure filings in Texas.

Such foreclosures are extremely rare in The Woodlands, with the notable exception of the rap artist Chamillionaire who walked away from a $2.2 million home earlier this year in the gated Carlton Woods neighborhood, because he "didn't stay there much."

In The Woodlands, says Blount, prices will trickle upward on non-distressed properties if inventory is reduced as a result of the moratorium on foreclosures.

"You likely won't see a large increase in pricing because many consumers are still having trouble getting loans," he said. "Those with non-distressed assets on the market should see more showings and thus more offers. Those who are unable to purchase a home will move into an apartment, which will slightly increase multi-family demand," Blount said.

Long-term outlook

Most in the real estate and banking industries agree that the market will reach equilibrium, sooner or later.

"We could actually see a more robust recovery in The Woodlands' housing market, and be in a better place when these foreclosures leave the market," Blount said.